Maine hospitals would stand to lose more than $3 billion over 10 years, according to our estimate that envisions a nightmare scenario where the Affordable Care Act cuts to hospitals remain but benefits to hospitals are repealed.
For this reason, Maine hospitals strongly urge Congress that there should be no ACA repeal unless there is an adequate and simultaneous replacement of its provisions.
The ACA contained both positives and negatives for hospitals. That was by design.
Hospitals were poised to benefit from three primary provisions in the ACA. The first was expanded health insurance coverage via the health insurance exchanges. The system of subsidies for people who do not receive health insurance through the workplace and instead have to rely on the “individual market” has successfully enabled more than 70,000 Mainers to gain affordable coverage.
The second positive feature of the ACA was the federal offer to cover the vast majority of costs associated with expanding eligibility for Medicaid coverage for low-income individuals. The Supreme Court blocked the implementation of Medicaid expansion as originally envisioned in the ACA. Subsequently, Gov. Paul LePage has blocked attempts to implement expansion in Maine.
The third positive feature of the ACA for hospitals was the expansion of the discounted pharmaceutical purchasing program for small, rural hospitals. The program is known as “340b” and it has been a vital lifeline for hospitals during the past four years. Pharmaceutical drug costs are the single largest driver of hospital cost increases in the Medicaid program — by a very wide margin.
These benefits to hospitals were, in part, offset by a series of cuts to hospital reimbursement. The mechanics of those cuts are a bit more difficult to explain in a sentence or two. The cuts were made to several of the Medicare reimbursement programs for hospitals.
The ACA also contains provisions to encourage higher quality in hospitals. Maine hospitals support change in this area to both reward high quality hospitals, and not just penalizing hospitals for failing to meet benchmarks. We believe in both carrots and sticks.
Hospitals understand that elections have consequences and that no federal law is written in stone. In fact, as we said, we welcome the opportunity to help improve some of the obvious shortcomings in the ACA. We also understand that while the ACA has improved affordability of health care for individuals, there is a financial strain on the federal government. And of course, that in turn is pressure on the taxpayers.
However, we do feel strongly that changes should be done fairly and responsibly.
Obviously, none of us knows what the replacement legislation for the ACA will include.
The Maine Hospital Association’s primary concern is what happens to the benefits, specifically the Exchange subsidies that account for $200 million a year in reimbursement to hospitals, and the 340b drug pricing program for Critical Access Hospitals, which saves our smallest hospitals $15 million a year.
While we’re hopeful that the nightmare doesn’t materialize, the public needs to know that hospitals simply can’t afford to lose anything close to $200 or $300 million per year. The hospital system in Maine would be crushed if the hospital cuts were to remain and the replacement was inadequate. Make no mistake, some hospitals would close and the rest would be strained to their limits. Health care workers would lose their jobs. A person’s ability to see a doctor, any doctor, could be severely limited.
Ultimately, though, the scope of the financial impact on hospitals is merely a proxy to help the public understand the benefits to Maine people. We’re talking about programs that have provided the opportunity for thousands of Mainers to see a doctor, fill a prescription or simply sleep at night knowing that they and their families are covered by health insurance.
Changes to the ACA, even good ones, must be done thoughtfully and with care. The physician adage: “First, do no harm” has never been more instructive.
Steven Michaud is president of the Maine Hospital Association in Augusta.
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